Simply put
- In October, SoftBank sold all 32.1 million shares of Nvidia for $5.83 billion, marking the company’s second exit from the AI chip maker.
- The asset sale is funding SoftBank’s investment in OpenAI, with the $22.5 billion deal expected to close in December following a contract amendment in October.
- “SoftBank’s investment in OpenAI was so large that the company needed to use existing assets to finance new investments,” CFO Yoshimitsu Goto told reporters.
SoftBank Group sold its entire stake in Nvidia in October, severing ties with the AI chip maker that had driven the sector’s historic rise. The Japanese conglomerate is directing funds toward OpenAI, even as the ChatGPT maker faces mounting losses and its CEO’s credibility faces criticism.
The Tokyo-based company revealed its complete exit from NVIDIA in a financial report on Tuesday, revealing that it and its asset management subsidiary “sold all of its shares in NVIDIA CORPORATION for $5.83 billion.”
The move came alongside a $9.17 billion partial sale of T-Mobile’s stake as part of an “asset monetization” effort to fund a $40 billion investment in OpenAI by the end of the year.
The sale comes as Wall Street questions whether spending on AI infrastructure is profitable and as OpenAI CEO Sam Altman faces intense scrutiny for publicly denying the company’s application for a federal loan guarantee, days after the company explicitly requested it in a letter to the White House.
SoftBank’s Vision Fund posted an explosive investment profit of $23.4 billion (3.54 trillion yen) in the quarter, of which $14.3 billion (2.16 trillion yen) came from increasing the value of its OpenAI holdings to a pre-money valuation of $260 billion.
With this profit, the company’s net profit more than doubled to $19.3 billion (2,924 billion yen), an increase of 190.9% from the previous year.
The Nvidia sale will be SoftBank’s second exit from the chip maker, following an initial $4 billion stake purchase in 2017 and a sale in early 2019. The group subsequently re-entered and released the position again in October.
follow the path of money
To finance its investment in OpenAI, SoftBank issued $4.1 billion (620 billion yen) in yen bonds and $4.2 billion in foreign bonds, and arranged bridge loans of $8.5 billion to OpenAI and $6.5 billion to ABB Robotics.
“SoftBank’s investment in OpenAI was so large that the company needed to leverage existing assets to finance new investments,” Yoshimitsu Goto, the company’s chief financial officer, said in a press conference. CNBC Report.
On March 31, SoftBank agreed to use $30 billion of its own funds to invest up to $40 billion in OpenAI, with plans to raise $10 billion in April and $22.5 billion in December, according to filings.
The acquisition of Robotics is in line with SoftBank’s mission to “enable artificial super intelligence (ASI) for the advancement of humanity,” and will invest in leading generative AI companies with a focus on AI chips, robotics, data centers and energy, according to the filing.
SoftBank’s sale of Nvidia’s stake is “a strong but very unexpected move away from hardware to AI projects and the data that powers them,” said Jiahao Sun, CEO of decentralized AI platform FLock.io. decryption.
market warning signs
Nvidia’s main supplier, Taiwan Semiconductor Manufacturing Co., posted 16.9% sales growth in October, the slowest pace since February 2024.
Short seller Michael Burry’s Scion Asset Management unveiled a bearish bet on Nvidia last week, even as Meta, Alphabet, Amazon and Microsoft plan to spend more than $400 billion on AI infrastructure in 2025.
Nvidia (NVDA) stock was down 1.46% in pre-market trading after closing at $199.05, according to data from Yahoo Finance, while SoftBank Group (SFTBY) was little changed in pre-market trading after closing 2.74% higher at $72.40.
generally intelligent Newsletter
A weekly AI journey told by Gen, a generative AI model.